Bianca Orsi

Postgraduate researcher Bianca Orsi

Job Market Paper

Currency Hierarchy and the Role of Peripheral Currencies in the International Monetary System

The current literature on currency internationalisation assumes that the higher degree of currency internationalisation can be translated into a higher position in the currency hierarchy. However, there is evidence to suggest that when a currency is internationalised only as a short-term investment, its position at the hierarchy does not improve. This chapter empirically investigates the relationship between the different types of currency internationalisation and their resulting position within the currency hierarchy. This study builds on the existing literature by introducing another type of currency internationalisation: the short-term investment currency. A cluster analysis is conducted in order to analyse the types of currency internationalisation that are fulfilled by each of the currencies. Results have revealed that some currencies, particularly those issued by emerging countries, are mostly held for investment purposes in a short period of time. Therefore, the growing internationalisation of peripheral currencies does not represent an increase in the confidence of investors on those currencies, which remain at the bottom of the hierarchy. Our study found evidence to suggest that the linear relationship between currency internationalisation and currency hierarchy often assumed in the literature does not hold for those currencies placed at the bottom of the hierarchy.



BSc Economics at Universidade Federal do Rio de Janeiro (UFRJ)

MSc Economics at University of Leeds


MSc Economics Brazil Scholarship, Leeds University Business School, September 2013

PhD Scholarship, National Council for Scientific and Technological Development (CNPq), February 2015

3 Minutes Competition, The Brazilian Association of Postgraduate Students and Researchers in the United Kingdom (Abep-UK), May 2016

Conference Presentations

Workshop “The International Monetary System and Internationalisation of Emerging Market Currencies” – Berlin, Germany (2018)

21st Conference of the Research Network Macroeconomics and Macroeconomic Policies (FMM) – Berlin, Germany (2017)

INET Conference – Edinburg, United Kingdom (2017)

Young Scholars Initiative (YSI): Festival for New Economic Thinking – Edinburg, United Kingdom (2017)

X Encontro da Associação Keynesiana Brasileira (AKB) – Brasília, Brasil (2017)

PILAS (Postgraduates in Latin American Studies) Annual Conference – University of Leeds, United Kingdom (2017)

IX Abep-UK Conference – “Science and Social Development: Challenges In Times of Crisis” – London, United Kingdom (2017)

Post-Keynesian Study Group (PKSG) PhD Conference – London, United Kingdom (2017)

White Rose Doctoral Training Centre: Managing In Turbulent Times – York, United Kingdom (2017)

6th White Rose Doctoral Training Centre Economics Conference – Sheffield, United Kingdom (2017)

Workshop Currency Hierarchy: Update of the Research Agenda – Berlin, Germany (2016)

VIII Abep-UK Conference – “Research and Development: Shaping the Future of Brazil” – London, United Kingdom (2016)

5th White Rose Doctoral Training Centre Economics Conference –York, United Kingdom (2016)

Workshop Currency Internationalisation: An Interdisciplinary and Timely Dialogue – Liverpool, United Kingdom (2016)

Series of Informal Seminars for Economics Doctoral Students (SISEDOCS) – University of Leeds (2015, 2016 and 2017)


Thesis Title

Currency Internationalization and Currency Hierarchy in Emerging Economies: The Role of the Brazilian Real


Dr Annina Kaltenbrunner

Professor Gary Dymski


Currency hierarchy; currency internationalisation; emerging economies; exchange rate; inflation; interest rate; monetary policy; post-Keynesian economics.

Thesis Summary/Synopsis

The debate on currency internationalisation has become a central issue of discussion, as globalization has increased the volume of international capital flows between countries. A currency may be considered internationalised to the extent that it is widely used by residents and, particularly, non-residents in the international market. So this raises the questions of why and how some currencies are more internationalised than others. The literature on the international use of national money generally discusses the three money functions at the international level: medium of exchange, unit of account and store of wealth. One can observe, however, that only a few currencies that fulfil the money functions are widely used, whilst several currencies have little or no relevance in the international market. Thus, the international monetary system is asymmetric and exhibits a hierarchical relationship between central and peripheral currencies.

Given the importance of central currencies to the international market, there is some vague understanding of the internationalisation of peripheral currencies. The first aim of this research is to identify the different types of currency internationalisation in emerging countries, whose currencies do not fulfil or partially fulfil the international money functions. In addition, the research aims to understand the relationship between the different types of currency internationalisation and the position of currencies in the hierarchy. The second aim of this research is to conduct a panel data analysis on the determinants of each type of currency internationalisation for central and peripheral currencies. The hypothesis of this thesis is that each type of currency internationalisation will be explained by different determinants. Driven by the lack of knowledge on the internationalisation of peripheral currencies, the third aim of this research is to study the case of the Brazilian real to evaluate the implications of policy strategy and regulation to currency internationalisation.



Teaching Assistance Experience

  • Statistics for Economics and Business - Undergraduate
  • Mathematics for Economics and Business - Undergraduate

Academic References


Referee 1 Name: Gary Dymski



Referee 2 Name:  Annina Kaltenbrunner